Surety Bond Insurance

On 19th December, 2022, Ministry of Road Transport & Highways launched one of India’s first-ever Surety Bond Insurance product from Bajaj Allianz.

About Surety Bond: Surety bonds are a contract or a three-way agreement that are guarantees of payment, which insurers issue. The surety (insurance companies/banks) provides the financial guarantee to the obligee (government) that the principal (contractor) will fulfil their obligations as per the agreed terms.

• In case the contractor does not fulfill the terms then the Principal can claim surety bonds to recover the losses.
• Simply, the surety is provided by an insurance company which acts as a security arrangement for infrastructure projects and insulates the contractor as well as the principal.